DAILY REVIEW 7 Oct 2013
EU: Weekly: The candle is a small spread (169pips) bull closing ½ off the high on below average vol>1week with bearish volume divergence. The Daily candle is a normal spread (94pips) bear closing off the low on below-average vol<4days. The close and volume suggests no selling pressure. “06 September 2013 – The main theme in the FX space was renewed US dollar strength as QE tapering talk ramped up. – IG Markets” This resulted in the downward price action last Friday and being a Friday, market participation was likely more SM as can be seen by the relatively weak volume activity. The Asian range is 1.3558 – 1.3573 with a TR 1.3537 – 1.3558 Prices gapped up by 6pips on the open. Notable levels:  1.3537, 1.3520 confluence with 1.3517 (23.6%Fib), 1.3597 (Fri NY high) If this is a game of psycho, then SM has got the herd sold on the “it’s going to drop like a rock” so the likely move will be to create buying pressure to remove weak shorts whilst inducing trend traders long, reverse and drop again to fade weak longs and reverse back upwards. The only thing that is clear is that neither the US nor Europe are strong at the moment so we can expect news without substantive data or fundamentals which will make for whipsaws and unexpected movements.
EU long levels:  1.3537, 1.3520, 1.3505 EU short levels:  1.3573, 1.3600, 1.3631, 1.3655, 1.3670, 1.3700, 1.3715


GU: Weekly: The candle is a normal spread (255pips) pin high bear closing at the low on average vol>5weeks with bearish volume divergence. The Daily candle is a large spread (173pips) bear closing at the low on below average vol<24days. The candle close and spread suggests more downside and the volume suggests more mark-down than herd participation. Notable levels: confluence[H1 ema200 @ 1.6114 M15 ema @ 1.6107 61.8% Fib 1.6110], 38.2%Fib @ 1.6070, 23.6%Fib @1.5917 confluence with trend channel support. Gap close level @ 1.5872 Weekly ema200@ 1.5946 Price opened with a +17pips gap up that has not been closed yet. The Asian range is 1.6015 – 1.6047 The TR is 1.6004 - 1.6076 With the daily candle close, price is almost certain to make a lower low today and taking any long above Friday’s low before it happens may well be suicidal. Looking at the market structure, the move is more likely to be “correcting” in market terminology rather than a full blown reversal at this point. Price can be expected to push lower and re-accumulate for a push back up, possibly when the NFP is finally released, who knows? SM is likely to fade weak shorts before reversing down again, at this point, it is unlikely to see longs coming back into the market as a lot of them will have been gobbled up by last week’s moves. 
GU long levels:  1.5978, 1.5954, 1.5931, 1.5848, 1.5824 GU short levels: 1.6076, 1.6120, 1.6155, 1.6180, 1.6197, 1.6226, 1.6240, 1.6259, 1.6320, 1.6353, 1.6380